Quick reference guide to the North Carolina Wage and Hour Act

Recordkeeping Requirements
General Employee Time and Pay Records: Every
employer covered by the N. C. Wage and Hour Act must
keep certain records for each non- exempt employee. The
records maintained shall be complete, accurate and show
all hours worked by each employee in each workweek.
No particular form is required.
The records must contain the following information
for each employee:
Full name of the employee
Social Security number
Home address and phone number
Occupation or job title
Time of day and day of week the employee’s work-week
begins
Regular rate of pay ( hourly or salary)
Hours worked each workday
Total hours worked each workweek
Total straight- time earnings each workweek
Total overtime earnings each workweek
Total additions to or deductions from wages
Total gross wages paid each pay period
Date of each payment
All other records required by statute or rule for enforce-ment
of any provision of the Wage and Hour Act
These records must be retained by employers for
three years.
Youth Employment Certificate: An employer may not employ
any youth under 18 until the youth has obtained a youth
employment certificate ( YEC). Certificates may be obtained
online at www. nclabor. com/ wh/ youth_ instructions. htm. The
employer shall maintain a copy of the youth employ-ment
certificate as long as the youth is employed and
for two years after employment ends.
Posting: Employers must display an official poster outlin-ing
North Carolina’s workplace laws. A free copy of the
poster may be obtained from the N. C. Department of
Labor, at 1- 800- NC- LABOR ( 625- 2267).
Additional Records to Be Maintained: Besides the
records outlined above, the N. C. Wage and Hour Act
requires the following records be retained: tip credits,
wage deductions, vacation and sick leave policies,
and wages based on bonuses, commissions or other
forms of calculations.
This sheet provides a general summary of the basic
recordkeeping requirements of the N. C. Wage and
Hour Act, Sections 25.1- 25.25, and Administrative
Rules, Title 13 N. C. Administrative Code Chapter 12.
Frequently Asked Questions
Q: Where do I get a work permit for a minor under 18?
A: Youth employment certificates may be obtained on- line
at www. nclabor. com/ wh/ youth. htm.
Q: I am an adult and my employer does not allow her
employees to take a 15- minute break every four hours. Is
this legal?
A: Yes. Employers are not required to give employees 16
or older a 15- minute break or meal break.
Q: My child is 17 and a senior in high school. Her
employer is requiring her to work until midnight when
there is school the next day. Is this legal?
A: No. This is not legal unless approved in writing by the
youth’s principal and parent or guardian.
Q: Is it legal for an employer to pay a waitress less than
the minimum hourly wage? My employer counts my tip
money when he computes my earnings and figures my
paycheck.
A: Yes. If the employer pays at least $ 3.13 per hour in
wages and the waitress certifies the tips received, the
employer may count the tip money when computing
wages owed.
Q: Can an employer pay someone a salary and not have
to worry about overtime?
A: Not in all cases. Just putting an employee on salary
does not necessarily exempt that employee from overtime
pay. The employee still has to meet certain tests to be
exempt as a manager, supervisor, administrative employ-ee,
professional employee or an outside salesperson.
Q: I own a business in the private sector. Can I give comp
time to my employees instead of paying them time and
one- half overtime pay?
A: No. A business in the private sector cannot give comp
time in place of paying the time and one- half overtime pay
for the hours its non- exempt employees work in excess of
40 in a workweek. You may be thinking of public sector
employers who are allowed by law to give their employ-ees
time and one- half comp time hours for the hours
worked in excess of 40 in a workweek. A business in the
private sector can give comp time to its bona fide exempt
employees since these employees are not required to be
paid for overtime hours worked. Such a comp time policy
can be hour- for- hour but must be in writing as with any
other wage benefit policy.
Quick Reference Guide
to the North Carolina
Wage and Hour Act
Cherie K. Berry
Commissioner
Wage and Hour Bureau
1101 Mail Service Center
Raleigh, NC 27699- 1101
( 919) 807- 2796
1- 800- NC- LABOR
www. nclabor. com
Printed 2/ 07
2,000 copies of this public document were printed at a cost of $ 138, or $. 07 per copy.
Minimum Wage
The minimum wage is $ 6.15 per hour. Certain full- time
students may be paid 90 percent of the minimum wage,
rounded to the lowest nickel.
An employer may pay as little as $ 3.13 per hour to tipped
employees so long as each employee receives enough
in tips to make up the difference between the wages paid
and the minimum wage. Employees must be allowed to
keep all tips, except that pooling is permitted if no
employee’s tips are reduced more than 15 percent. The
employer must keep an accurate and complete
record of tips as certified by each employee for each
pay period. Without these records, the employer may
not be allowed the tip credit.
The state minimum wage provisions do not apply to some
employers and employees who are exempt.*
Overtime
The N. C. Wage and Hour Act, N. C. General Statute § 95-
25.4, and the comparable federal law, the Fair Labor
Standards Act ( FLSA), regulate wage rates for overtime pay.
Unless specifically exempted, employees who work more
than 40 hours during any workweek must be paid time
and one- half the regular promised rate of pay, except after
45 hours at seasonal recreational and amusement estab-lishments.
The overtime rate applies to each hour, or fraction of an
hour, worked after more than 40 in any workweek. Certain
salaried employees may also be eligible for overtime for all
hours worked in excess of 40 or 45 hours, unless otherwise
exempted.
The state overtime provision does not apply to some
employers and employees who are exempt.*
____________
* The state minimum wage and overtime provisions apply primarily to
establishments doing less than $ 500,000 annual gross volume.
Youth Employment
Rules for all youths under 18 include: Employment
certificates are required. Hazardous, detrimental and
prohibited work is not permitted.
Additional rules for 16- and 17- year- olds include: No
work between 11 p. m. and 5 a. m. when there is school the
next day. Exception: When the employer gets written
permission from the youth’s parents and principal.
Additional rules for 14- and 15- year- olds include: Work
can be performed at retail businesses, food service estab-lishments,
service stations and offices of other businesses.
Work is not permitted in manufacturing or mining, on con-struction
sites, with power- driven machinery, or on the
premises of a business holding an ABC permit for the on-premises
sale and consumption of alcoholic beverages.
Maximum hours per day: Three on school days; eight
if a nonschool day.
Maximum hours per week: 18 when school is in ses-sion;
40 when school is not in session.
Hours of the day: May work only between 7 a. m. and
7 p. m. ( except to 9 p. m. from June 1 to Labor Day).
Breaks: 30- minute breaks are required after any peri-od
of five consecutive hours of work.
Additional rules for youths under 14 include: Work is
generally not permitted except when working for the
youth’s parents, in newspaper delivery to the consumer,
modeling, or acting in a movie, television, radio or theatri-cal
production.
These state youth employment provisions do not apply to
farm, domestic or government work.
Wage Payment
Wages are due on the regular payday. If requested, final
paychecks must be mailed. When the total of wages due
is in dispute, the employer’s payment of the undisputed
portion cannot restrict the right of the employee to con-tinue
his or her claim for the rest of the wages.
Employees must be notified of paydays, pay rates, policies
on vacation pay plans, sick leave, and of commission,
bonus and other pay matters.
Deductions From Pay
Deductions from paychecks are limited to those required
by law and those agreed to in writing on or before payday.
When the deduction is known and agreed upon in
advance, the employee’s written authorization must be
signed on or before the payday from which the deduction
is made and must indicate the reason for the deduction.
Before deductions are made, the employee must receive
advanced written notice of the total to be deducted, must
receive written notice of his or her right to withdraw the
authorizations, and must be given a reasonable oppor-tunity
to withdraw the authorization in writing.
Deductions for the benefit of the employer must com-ply
with the following: In non- overtime workweeks,
wages may be reduced to the minimum wage level; in
overtime workweeks, wages may be reduced to the
minimum wage level for non- overtime hours; and no
reductions may be made to overtime wages owed.
In addition to complying with the requirements above,
deductions for cash or inventory shortages or for loss
or damage to an employer's property may not be taken
unless the employee receives seven days advance
notice. This seven- day rule does not apply to these
deductions made at termination.
Recoupment of an overpayment of wages resulting from a
miscalculation or other bona fide error, advances of wages
to employee or to a third party at the employee’s request,
or the principal of a loan from the employer to the employ-ee
does not require an authorization from the employee.
Deductions for interest and other charges related to loans
require a written authorization as described above.
When the deduction is for the employer’s benefit and
the deduction total is not known and agreed upon in
advance, the written authorization must be signed on
or before the payday from which the deduction is
made, must state the reason for the deduction, and
must state the dollar total or percentage of wages to
be deducted from one or more paychecks.
When criminal process has been issued, the employee
has been indicted or arrested for a charge incident to a
cash shortage, inventory shortage or damage to an
employer’s property, the employer may withhold or
divert without written authorization any portion of
wages owed to recoup the total owed by the employee
for such shortages or damage. The limits established
for overtime and non- overtime workweek still apply. If
the employee is not found guilty, the deduction shall be
reimbursed to the employee.
A written authorization or written notice required of this
section may be in the form of an electronic record in com-pliance
with the Uniform Electronic Transactions Act.
Nothing in this section shall preclude an employer
from bringing a civil action to collect any money due
the employer from the employee.
Any employer who provides vacation pay plans to
employees shall give vacation time off or payment in lieu
of time off in accordance with the company policy or prac-tice.
Employees must be notified in writing, or through a
posted notice, of any company policy or practice that
results in the loss or forfeiture of vacation time or pay.
Employees not so notified are not subject to such loss or
forfeiture.
The wage payment provisions apply to all employers
doing business in North Carolina except federal, state
and local governments.

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Recordkeeping Requirements
General Employee Time and Pay Records: Every
employer covered by the N. C. Wage and Hour Act must
keep certain records for each non- exempt employee. The
records maintained shall be complete, accurate and show
all hours worked by each employee in each workweek.
No particular form is required.
The records must contain the following information
for each employee:
Full name of the employee
Social Security number
Home address and phone number
Occupation or job title
Time of day and day of week the employee’s work-week
begins
Regular rate of pay ( hourly or salary)
Hours worked each workday
Total hours worked each workweek
Total straight- time earnings each workweek
Total overtime earnings each workweek
Total additions to or deductions from wages
Total gross wages paid each pay period
Date of each payment
All other records required by statute or rule for enforce-ment
of any provision of the Wage and Hour Act
These records must be retained by employers for
three years.
Youth Employment Certificate: An employer may not employ
any youth under 18 until the youth has obtained a youth
employment certificate ( YEC). Certificates may be obtained
online at www. nclabor. com/ wh/ youth_ instructions. htm. The
employer shall maintain a copy of the youth employ-ment
certificate as long as the youth is employed and
for two years after employment ends.
Posting: Employers must display an official poster outlin-ing
North Carolina’s workplace laws. A free copy of the
poster may be obtained from the N. C. Department of
Labor, at 1- 800- NC- LABOR ( 625- 2267).
Additional Records to Be Maintained: Besides the
records outlined above, the N. C. Wage and Hour Act
requires the following records be retained: tip credits,
wage deductions, vacation and sick leave policies,
and wages based on bonuses, commissions or other
forms of calculations.
This sheet provides a general summary of the basic
recordkeeping requirements of the N. C. Wage and
Hour Act, Sections 25.1- 25.25, and Administrative
Rules, Title 13 N. C. Administrative Code Chapter 12.
Frequently Asked Questions
Q: Where do I get a work permit for a minor under 18?
A: Youth employment certificates may be obtained on- line
at www. nclabor. com/ wh/ youth. htm.
Q: I am an adult and my employer does not allow her
employees to take a 15- minute break every four hours. Is
this legal?
A: Yes. Employers are not required to give employees 16
or older a 15- minute break or meal break.
Q: My child is 17 and a senior in high school. Her
employer is requiring her to work until midnight when
there is school the next day. Is this legal?
A: No. This is not legal unless approved in writing by the
youth’s principal and parent or guardian.
Q: Is it legal for an employer to pay a waitress less than
the minimum hourly wage? My employer counts my tip
money when he computes my earnings and figures my
paycheck.
A: Yes. If the employer pays at least $ 3.13 per hour in
wages and the waitress certifies the tips received, the
employer may count the tip money when computing
wages owed.
Q: Can an employer pay someone a salary and not have
to worry about overtime?
A: Not in all cases. Just putting an employee on salary
does not necessarily exempt that employee from overtime
pay. The employee still has to meet certain tests to be
exempt as a manager, supervisor, administrative employ-ee,
professional employee or an outside salesperson.
Q: I own a business in the private sector. Can I give comp
time to my employees instead of paying them time and
one- half overtime pay?
A: No. A business in the private sector cannot give comp
time in place of paying the time and one- half overtime pay
for the hours its non- exempt employees work in excess of
40 in a workweek. You may be thinking of public sector
employers who are allowed by law to give their employ-ees
time and one- half comp time hours for the hours
worked in excess of 40 in a workweek. A business in the
private sector can give comp time to its bona fide exempt
employees since these employees are not required to be
paid for overtime hours worked. Such a comp time policy
can be hour- for- hour but must be in writing as with any
other wage benefit policy.
Quick Reference Guide
to the North Carolina
Wage and Hour Act
Cherie K. Berry
Commissioner
Wage and Hour Bureau
1101 Mail Service Center
Raleigh, NC 27699- 1101
( 919) 807- 2796
1- 800- NC- LABOR
www. nclabor. com
Printed 2/ 07
2,000 copies of this public document were printed at a cost of $ 138, or $. 07 per copy.
Minimum Wage
The minimum wage is $ 6.15 per hour. Certain full- time
students may be paid 90 percent of the minimum wage,
rounded to the lowest nickel.
An employer may pay as little as $ 3.13 per hour to tipped
employees so long as each employee receives enough
in tips to make up the difference between the wages paid
and the minimum wage. Employees must be allowed to
keep all tips, except that pooling is permitted if no
employee’s tips are reduced more than 15 percent. The
employer must keep an accurate and complete
record of tips as certified by each employee for each
pay period. Without these records, the employer may
not be allowed the tip credit.
The state minimum wage provisions do not apply to some
employers and employees who are exempt.*
Overtime
The N. C. Wage and Hour Act, N. C. General Statute § 95-
25.4, and the comparable federal law, the Fair Labor
Standards Act ( FLSA), regulate wage rates for overtime pay.
Unless specifically exempted, employees who work more
than 40 hours during any workweek must be paid time
and one- half the regular promised rate of pay, except after
45 hours at seasonal recreational and amusement estab-lishments.
The overtime rate applies to each hour, or fraction of an
hour, worked after more than 40 in any workweek. Certain
salaried employees may also be eligible for overtime for all
hours worked in excess of 40 or 45 hours, unless otherwise
exempted.
The state overtime provision does not apply to some
employers and employees who are exempt.*
____________
* The state minimum wage and overtime provisions apply primarily to
establishments doing less than $ 500,000 annual gross volume.
Youth Employment
Rules for all youths under 18 include: Employment
certificates are required. Hazardous, detrimental and
prohibited work is not permitted.
Additional rules for 16- and 17- year- olds include: No
work between 11 p. m. and 5 a. m. when there is school the
next day. Exception: When the employer gets written
permission from the youth’s parents and principal.
Additional rules for 14- and 15- year- olds include: Work
can be performed at retail businesses, food service estab-lishments,
service stations and offices of other businesses.
Work is not permitted in manufacturing or mining, on con-struction
sites, with power- driven machinery, or on the
premises of a business holding an ABC permit for the on-premises
sale and consumption of alcoholic beverages.
Maximum hours per day: Three on school days; eight
if a nonschool day.
Maximum hours per week: 18 when school is in ses-sion;
40 when school is not in session.
Hours of the day: May work only between 7 a. m. and
7 p. m. ( except to 9 p. m. from June 1 to Labor Day).
Breaks: 30- minute breaks are required after any peri-od
of five consecutive hours of work.
Additional rules for youths under 14 include: Work is
generally not permitted except when working for the
youth’s parents, in newspaper delivery to the consumer,
modeling, or acting in a movie, television, radio or theatri-cal
production.
These state youth employment provisions do not apply to
farm, domestic or government work.
Wage Payment
Wages are due on the regular payday. If requested, final
paychecks must be mailed. When the total of wages due
is in dispute, the employer’s payment of the undisputed
portion cannot restrict the right of the employee to con-tinue
his or her claim for the rest of the wages.
Employees must be notified of paydays, pay rates, policies
on vacation pay plans, sick leave, and of commission,
bonus and other pay matters.
Deductions From Pay
Deductions from paychecks are limited to those required
by law and those agreed to in writing on or before payday.
When the deduction is known and agreed upon in
advance, the employee’s written authorization must be
signed on or before the payday from which the deduction
is made and must indicate the reason for the deduction.
Before deductions are made, the employee must receive
advanced written notice of the total to be deducted, must
receive written notice of his or her right to withdraw the
authorizations, and must be given a reasonable oppor-tunity
to withdraw the authorization in writing.
Deductions for the benefit of the employer must com-ply
with the following: In non- overtime workweeks,
wages may be reduced to the minimum wage level; in
overtime workweeks, wages may be reduced to the
minimum wage level for non- overtime hours; and no
reductions may be made to overtime wages owed.
In addition to complying with the requirements above,
deductions for cash or inventory shortages or for loss
or damage to an employer's property may not be taken
unless the employee receives seven days advance
notice. This seven- day rule does not apply to these
deductions made at termination.
Recoupment of an overpayment of wages resulting from a
miscalculation or other bona fide error, advances of wages
to employee or to a third party at the employee’s request,
or the principal of a loan from the employer to the employ-ee
does not require an authorization from the employee.
Deductions for interest and other charges related to loans
require a written authorization as described above.
When the deduction is for the employer’s benefit and
the deduction total is not known and agreed upon in
advance, the written authorization must be signed on
or before the payday from which the deduction is
made, must state the reason for the deduction, and
must state the dollar total or percentage of wages to
be deducted from one or more paychecks.
When criminal process has been issued, the employee
has been indicted or arrested for a charge incident to a
cash shortage, inventory shortage or damage to an
employer’s property, the employer may withhold or
divert without written authorization any portion of
wages owed to recoup the total owed by the employee
for such shortages or damage. The limits established
for overtime and non- overtime workweek still apply. If
the employee is not found guilty, the deduction shall be
reimbursed to the employee.
A written authorization or written notice required of this
section may be in the form of an electronic record in com-pliance
with the Uniform Electronic Transactions Act.
Nothing in this section shall preclude an employer
from bringing a civil action to collect any money due
the employer from the employee.
Any employer who provides vacation pay plans to
employees shall give vacation time off or payment in lieu
of time off in accordance with the company policy or prac-tice.
Employees must be notified in writing, or through a
posted notice, of any company policy or practice that
results in the loss or forfeiture of vacation time or pay.
Employees not so notified are not subject to such loss or
forfeiture.
The wage payment provisions apply to all employers
doing business in North Carolina except federal, state
and local governments.